[Congressional Record Volume 145, Number 157 (Tuesday, November 9, 1999)]
[Senate]
[Pages S14395-S14396]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       MICROSOFT FINDINGS OF FACT

  Mr. GORTON. Mr. President, it was recently reported that Department 
of Justice anti-trust chief Joel Klein attended a party to celebrate 
James Glassman's new book ``Dow 36,000.'' During the party, Mr. Klein, 
who is prohibited from buying and selling stocks while he serves in his 
current post, was overheard saying to the author, ``Wow. Dow 36,000--I 
hope it'll wait until I get out of office.'' Mr. Glassman reportedly 
responded that Mr. Klein was already doing his part to keep the Dow 
down.
  Mr. President, I am here to report that not even Joel Klein and the 
Department of Justice can shake the confidence of investors all across 
this great land who responded to Judge Jackson's Findings of Fact with 
a mild yawn. Apparently, investors understand that punishing trail 
blazing companies that have brought dramatic and positive change to 
consumers never has been, and never should be, the American way.
  Despite the Government's attempts to turn the public against 
Microsoft, Microsoft continues to be one of the most respected 
companies in America. A majority of Americans believe Microsoft is 
right and the Government is wrong in this current lawsuit. In fact, a 
Gallup poll conducted over the weekend suggested that 67 percent of 
Americans still have a positive view of Microsoft despite the efforts 
of the Federal Government.
  Judge Jackson made clear early in the case that he shared the 
administration's desire to punish Microsoft for being too successful. 
His Findings of Fact do not remotely reflect the phenomenal competition 
and innovation that is taking place in the high-tech industry every 
day. Reading the Findings, it is clear that even this judge could not 
document tangible consumer harm. Judge Jackson's thesis is that 
Microsoft is a tough competitor and that that toughness must stifle 
innovation and must harm consumers. But the judge could document no 
tangible harm * * * and this is why he will be reversed.
  When you look at the world around us, whether in the workplace, at 
home, in schools, you see first-hand how 25 years of innovation in the 
high-tech industry has empowered and enriched people from all walks of 
life.
  Every family and every community in America has benefited from the 
information revolution fueled by Microsoft. Sitting on the desktop in 
every office, school and hospital is a machine that brings power 
directly to people. Ten years ago only governments and large 
institutions had the power that so much information and knowledge 
brings. Today, because of competition among software and Internet 
businesses, that power runs to people and to families in cities and 
towns everywhere.
  While the trial was going on, the high-tech industry has changed 
dramatically and reinvented itself a dozen times. Competition is alive 
and well and consumers are reaping the benefits.
  Do the following numbers sound like they come from an industry that 
is stifled by monopolistic practices?
  In 1990, there were 24,000 software companies. Today there are 
57,000. And this growth shows signs of accelerating even further.
  The high-tech industry accounts for 8.4 percent of America's GNP and 
one-third of our economic growth.
  This year, the software industry alone will add almost $20 billion in 
exports to America's balance of trade.
  It is particularly amazing that Judge Jackson found that barriers to 
entry into the market are too high. Apparently Linus Torvalds didn't 
get that memo. The 21-year-old student at the University of Helsinki 
recently disseminated into cyberspace the code for a computer operating 
system he had written. This experiment has evolved into the Linux 
operating system, which now has over 15 million users and is supported 
by such industry heavyweights as IBM, Intel, Hewlett-Packard, Dell, 
Gateway, Compaq, and Sun Microsystems.
  Also fascinating is the fact that the co-founder of Netscape, Marc 
Andreessen, created the technology for the Netscape web browser when he 
was a student at the University of Illinois. Four years later, the 
company he founded sold for $10 billion. Clearly, anyone with a great 
new idea can compete in this fast-paced competitive economy.
  Although Microsoft is at the center of this fantastic growth that has 
helped the economy and brought incredible technological advances to 
consumers, its position as a market leader is not secure. It remains 
true that anyone, from any background, can by hard work and 
determination, take on the most successful corporation of the 20th 
century. As the explosive growth of Linux shows, Microsoft, too, must 
be allowed to compete, or be relegated to the slow lane of the 
information superhighway.

  The competitive environment in high-tech has never been stronger. 
Every day new alliances change the face of the industry. America Online 
has transformed itself into a web, software, and hardware dynamo by 
purchasing Netscape, forming an alliance with Sun Microsystems, and 
investing heavily in Gateway. It is competitors like this who are 
positioned to ensure that vigorous competition, which is a boon to 
consumers, will lead the way into the 21st century.
  Should the Federal Government intervene, our entire economy will 
suffer. By picking winners and losers, stifling innovation and 
attempting to regulate through litigation, the Federal Government can 
do immeasurable harm to an industry it admits it doesn't even 
understand. Need I remind you that these are the same people who have 
brought you models of efficiency such as the IRS?
  Regardless of the exponential growth and vigorous competition in the 
high-tech industry, Judge Jackson seems convinced that consumers have 
been harmed by Microsoft. This he believes despite the testimony of the 
government's own witness, MIT professor

[[Page S14396]]

Franklin Fisher, who when asked whether consumers have been harmed by 
Microsoft, responded, ``On balance, I'd think the answer is no.''
  Nevertheless, I was stunned when listening to Joel Klein proclaim 
that the Findings were great news for consumers. When is it good news 
for consumers to learn that the Federal Government is now running the 
high-tech industry? When Bill Gates, Scott McNealy (Sun CEO), or the 
head of a new high-tech start-up want to integrate new products or 
features into their software they will first have to get clearance from 
the de facto CEO of high tech, Joel Klein.
  Speaking of the Associate Attorney General, if you were watching CNN 
last Friday evening without the volume on, you would have thought from 
the looks on their faces that Janet Reno and Joel Klein had just won 
the POWERBALL lottery or been given $10 million dollars by Ed McMahon. 
Mr. President, I repeat--this decision is not good news for consumers. 
The findings represent a terrible precedent, not only for Microsoft, 
but for high-tech companies in Silicon Valley, Austin, TX and the 
Dulles corridor in Virginia. The message is: if you get big, or too 
successful--you will be punished. The Department of Justice is keeping 
an eye on you--be careful or you may be next. The capital of the high-
tech world isn't in Silicon Valley or Washington State, it's 
conveniently located within our Department of Justice on Pennsylvania 
Avenue.
  But, Mr. President, I have been a frequent critic of the Department 
of Justice's attacks against Microsoft and the high tech industry for a 
long time now. I will continue to ask questions--I will continue to 
defend the ability of high-tech companies that wish to compete without 
the threat of government intervention. I will continue to be deeply 
concerned about how the Department of Justice's action on Friday will 
jeopardize America's standing as a global leader in the field of 
technology. The Department of Justice has now invited Microsoft's 
foreign competitors to use their governments to limit Microsoft's 
success. Joel Klein has just tilted the balance of power in favor of 
high tech companies abroad, in effect saying to Microsoft: Slow down 
and let the rest of the world catch up.

  But I am sure many of these same questions and concerns will be 
raised by Microsoft's own employees next week when they host Vice 
President Gore on the Redmond campus.
  To conclude, I repeat: This case should be dropped because antitrust 
laws exist to protect consumers--people who buy goods and services. 
Antitrust laws were not created to protect Microsoft's competitors, but 
that is what this Justice Department is doing. It is using the power of 
the Federal Government to punish Microsoft for being too successful in 
comparison to its competitors.
  In the end, I believe, higher Federal courts will throw this case 
out. The truth and the correct legal analysis will prevail--Microsoft 
has not harmed consumers and, thus has not violated our antitrust laws.

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